T. Rowe Price Group, one of the world’s largest fund managers with $1.62 trillion in assets, replaced its chief executive officer after just five years and named a company insider to take over the post.
President Rob Sharps will succeed Bill Stromberg, who plans to retire Dec. 31 after 35 years at the company, according to a statement Thursday. Sharps will become chair of the management committee, join the company’s board and remain president.
A heavyweight in retirement savings, T. Rowe Price has primarily focused on actively managed U.S. mutual funds at a time when index-tracking products like exchange-traded funds are attracting increased investment. Sharps will face the challenge of proving the company can still grow and adapt against that backdrop.
Competition over investment management fees and pressure from passive funds are among the top issues confronting the company, Sharps, 50, said in a phone interview.
“This is a series of challenges that aren’t really new to us, that are established,” Sharps said.
He’s also taking the helm at a singularly uncertain time as CEOs grapple with returning employees to offices after more than a year of remote work during the Covid-19 pandemic. Stromberg, 61, said in April that T. Rowe Price would bring U.S. employees by Sept. 13, with some additional flexibility.
“It certainly is a strange moment,” Sharps said. “The lesson I would take away is that all enterprises have had to step up and evolve. I feel fortunate that T. Rowe had a strong culture coming in.”
Sharps joined the company in 1997 as an equity analyst. He rose through the ranks and has helped oversee corporate strategy, client relationships and product development.
Along with promoting Sharps, Eric Veiel was named global head of equity and Josh Nelson head of U.S. equity.
Celine Dufetel, who has been chief operating officer, chief financial officer and treasurer, will leave at the end of the month for a leadership position with a fintech company, T. Rowe Price said.
Head of finance Jen Dardis will become CFO and treasurer and join the management committee. Dufetel’s COO responsibilities will transition on an interim basis to Robert Higginbotham, a member of the management committee. Dufetel will serve in an advisory role until Aug. 31.
More than half of the Baltimore-based company’s assets are held in U.S. mutual funds. The firm had about $865.8 billion under management in those products at the end of the second quarter, according to an earnings release Thursday.
T. Rowe Price reported net revenue rose 36% to about $1.9 billion in the three months ended June 30. Adjusted earnings per share came in at $3.31, beating analysts’ estimates of about $3.20. Investors withdrew a net $600 million from its funds in the period.
“I have enormous confidence in Rob and in our full leadership team,” said Stromberg, who will retire as he reaches his sixth anniversary in the CEO role. “The readiness of that group gives me confidence now is a good time to step away.”
